Saudi Arabia’s recent decision to resume lamb and beef imports from the country after a hiatus of more than two decades has opened up substantial opportunities for meat producers, investors, and industry stakeholders.
Adnaan Patel, chief executive of Al Mabroor Select Meats, a vertically integrated meat business and supplier of halaal-certified meat products, shares his insights on the potential impact of this development.
Beef exports given the nod
The news of Saudi Arabia’s decision comes as a welcome surprise for Al Mabroor Select Meats, which has been actively engaged in business development within the Gulf region. Patel notes, “The announcement was anticipated, but extremely welcome.”
The company has already sent sample loads to regions like Qatar and Kuwait and initiated talks with Saudi Arabian importers.
The Saudi decision represents a significant opportunity for the expansion of distribution channels for livestock and meat products.
Patel highlights Al Mabroor’s vertical integration strategy, allowing them to breed livestock, provide them to abattoirs, and process the production into a variety of meat products tailored to specific domestic and international markets.
While the Saudi policy announcement is recent, South African meat producers have been building relationships with Saudi Arabian buyers for many years. Patel acknowledges the efforts of industry players such as Karan Beef and the department of trade and industry in resolving outstanding issues and facilitating the reopening of the Saudi market.
From the perspective of South African beef producers, the product itself remains unchanged. Adjustments have been made for traceability, provenance, and Halaal compliance protocols. With Saudi Arabia now part of the Brics group of developing nations, the trade regulations and customs requirements are expected to become more streamlined, reducing paperwork and delays.
Patel predicts increased potential for exporting livestock and other agricultural products as more trade agreements are concluded.
The CEO emphasises the significance of the Saudi announcement, stating, “It is an exciting time to be in the industry,” especially as Saudi Arabia’s well-developed market economy offers vast opportunities for South African beef producers.
Financial benefit
Financial investors in the beef sector are also set to benefit from the resumption of Saudi imports. The increased predictability and security of investments, coupled with expanded export markets, provide investors with more options and a wider range of potential business partners, ultimately reducing volatility.
As a Sharia-compliant fund, Al Mabroor is now strategically positioned to grow exports to Saudi Arabia, enhancing opportunities within Islamic nations and trading blocs. The psychological impact of the Saudi announcement is expected to boost confidence in South African exports across the economy.
Agbiz chief economist Wandile Sihlobo underscores the enormous upside of this opportunity, with Saudi beef imports valued at approximately $647 million annually, compared to South Africa’s current beef exports of $132 million per year. This disparity signals significant potential for growth, requiring collaboration across the sector to meet the anticipated surge in demand.
As the South African beef sector gears up for this transformative opportunity, Patel stresses the importance of synergies and collaboration among all industry players to effectively leverage and supplement existing efforts. The prospect of increased demand from Saudi Arabia is seen as a catalyst for substantial growth at every level of the value chain, presenting a promising future for South Africa’s beef industry.
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